Rabobank: El Niño can have “significant impact”

El Niño 2015 is underway, says Rabobank, and global meteorological organisations expect the event to persist through the year. By its very nature, through shifting rainfall and temperatures across the tropical Pacific, the company believes that El Niño can have a significant impact on the production of agri commodities. Every El Niño is different, Rabobank […]

El Niño 2015 is underway, says Rabobank, and global meteorological organisations expect the event to persist through the year. By its very nature, through shifting rainfall and temperatures across the tropical Pacific, the company believes that El Niño can have a significant impact on the production of agri commodities.

Every El Niño is different, Rabobank points out, including its duration and intensity. NOAA currently calls for a strong event, which would have implications for agricultural production through 2015/16 and future seasons. At this early stage, the most pronounced price impacts are expected for wheat futures, ICE Robusta coffee and ICE #11 raw sugar futures, it says.

Stocks and supplies of wheat, palm oil, sugar, coffee and soy oil appear adequate, Rabobank believes – but a strong El Niño would be expected to constrain production, potentially driving considerable price volatility from both fundamental and speculative influences.

More details on the impact of El Niño 2015 are available in the Rabobank Agri Commodity Markets Research report.